Drone safety systems developer ParaZero (NASDAQ:PRZO) soared on Wednesday following the successful completion of its safety solutions project. While drone flying has become popular among both hobbyists and commercial entities, midair malfunctions pose significant risks to people and property below. ParaZero aims to address this safety issue with a parachute deployment system, thus driving significant relevance for PRZO stock.
According to the official press release, ParaZero stated that the underlying safety solution development project was for a leading global automotive manufacturer ranked within the Fortune 500. Specifically, the enterprise-level client features a proprietary drone program. Further, the statement revealed that ParaZero received full payment for the first-of-its-kind custom variant of its innovative SafeAir drone safety system.
The project itself involved the development and testing of the SafeAir system to align with the challenging requirements and specifications of the Fortune 500 client’s proprietary aircraft. Notably, the development occurred from the design stage, “ensuring optimized and seamless integration, at unique flight envelope and characteristics.”
Encouragingly, ParaZero received its second purchase order from the aforementioned unnamed company a few months ago. “We are thrilled with the successful completion of this project, which showcases our high technical capabilities and our commitment to delivering top-tier solutions in drone safety,” remarked ParaZero CEO Boaz Shetzer.
Ultimately, the project helped lift ParaZero’s reputation as a provider of advanced safety solutions across various aerial platforms, including manned and unmanned air mobility vehicles.
PRZO Stock Presents Risks But Also Exceptional Blue-Sky Opportunities
At the root of the bullish narrative for PRZO stock is the potentially burgeoning total addressable market. Directly, ParaZero addresses the high dangers associated with malfunctioning drones colliding with pedestrians below. It’s a matter that has attracted the Federal Aviation Administration’s (FAA) attention as drones have become more prevalent.
According to the University of Florida IFAS Extension, “[d]rones can cause injuries because of their quick movements, rotating parts, sharp blades, and edges. Injuries may happen not just to the user, but to anyone else in the area. They can also cause some hearing problems.” That dynamic could be exacerbated due to the vast number of drones registered in the U.S. Nominally, that’s more than 1.7 million in 2020.
Further, the academic study reveals that 4,250 drone injuries occurred from 2015 to 2020. Among the injured, 21% were younger than 18 years, and 84% of the patients were male. “The most common injury diagnoses were lacerations (72%) followed by contusion/abrasion (10%), strain/sprain (5%), and internal injury (5%). The most injured body parts were upper extremities (mostly fingers [56%]), head (24%), lower extremities (14%), and trunk (6%),” the research paper noted.
With society returning to normal from the Covid-19 crisis combined with the projected growth of the global drone market, ParaZero enjoys a tremendous upside opportunity. Therefore, the spike higher in PRZO stock isn’t particularly surprising.
Why It Matters
No analysts currently cover PRZO stock, making it an incredibly risky proposition. While presenting a business with massive upside potential, the company only carries a market capitalization of just over $6 million. Therefore, prospective investors must exercise extreme caution with this penny stock.
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On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
